Green Your Taxes

Wouldn’t it be wonderful if you could get a tax break for living a greener life?

As yet, there’s no tax credit for composting, buying organic chicken or using CFL lightbulbs. (Darn, those things are expensive!). But some eco-friendly upgrades can yield big rebates on your 2009 return.

Remember, a tax credit is a sweet deal:

It reduces your tax bill, dollar for dollar (i.e. a $2,000 credit knocks down the amount you owe by… $2,000).

If you made energy-efficient home improvements last year (windows, doors, roofs, water heaters, wood or pellet stoves heating/cooling systems, etc.) you can save up to $1,500.

If you installed an alternative energy source in your home (wind, solar, etc.), you may qualify for a much bigger tax break: 30% of the cost, with no limit on the amount of the credit.

If you bought a hybrid vehicle, you may qualify for a tax credit up to $7,500. And that’s in addition to the vehicle sales tax deduction.

IRS Warning: Of course, you need to double-check that the products you bought qualify under IRS rules.